myfoxboston.com
The National Association of Realtors released figures saying that the sales of existing homes decreased 16.7% in December. They had expected home sales to be down because traditionally around this time of the year home sales drop off, but they hadn’t expected the percent to be as high as it was.
The belief is that sales dropped off considerably because nobody was sure if there would be an extension of the tax credit to take advantage of, and since most people had heard how long the process could take they just didn’t bother trying. They are are hoping that the government extension of the plan and the inclusion of the $6,500 tax credit for existing homeowners who want to upgrade will help spur things a bit.
At the same time, the NAR reported that home sales overall were 4.9% higher in 2009 than they were in 2008, the first sales gain since 2005. They also said that home sales in November were around 7.4% higher than the norm, probably because many people were trying to beat the original sunset date for the tax credit.
Of course, there are other problems to still deal with. Seeing the unemployment rate go up didn’t help, and banks are still wary of loaning money out to many people, especially with the new FHA loan rules. Another story out there is stating that many banks are worried that interest rates will be rising and this might not only deter some people from wanting to purchase homes, but because they’ve been able to borrow money themselves at a very low rate. Thus helping to make their bottom lines more profitable, it will make it less appealing to them to take on loans that will hurt their profit margins. To me this seems pretty baseless since we know all they would do is find a way to pass the extra costs on to the consumers anyway.
Still, everyone is hopeful that there will be a rush of potential buyers in February and March as we push towards the end of the tax credits.
See also:
FHA Credit Requirements
Wall Street Journal
Mitch Mitchell is a consultant who writes and participates in many different fields, including real estate finance issues. 
Lets just hope that the sales be go up on Feb or March, although last year there were sometime that home sales went up a bit.
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Interesting figures but I sometimes wonder if you lot in America dive too deep into figures. Too much analyzing for my liking. Here in Turkey we analysis the overall market and go from there. Sales are still down all over apart from the repossessed properties being sold by the court. approximately 50% increase. It seems that is the new buyers market for now.
I think we are going to see big swings in the numbers for the next year. It’s just part of a bad market correcting it’s self.
.-= Matt@Atlanta Metro Homes´s last blog ..Details on New Tax Credit Extension =-.
The buyer just holding thier breaths, and waiting to see if the Government is coming any new tax credit or similarly.
It’s getting better, but I suspect that there will be another drop in many US markets before the year is out.
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I am seeing some improvements these few months in the market. Let’s just cross our fingers for whatever may comes along in the real estate market.
.-= Orem Utah Homes´s last blog ..Previewing February’s New Home Sales: The numbers declined! =-.